Investor confidence is crucial to fund inventions and one sure way to help boost that is the implementation of strong patent laws and regulations.
Intellectual property is the market to make a name in
Intellectual property (IP) and patent laws in the UAE and the wider region are lacking in effectiveness, hindering investment and technological advancement.
According to the World Intellectual Property Organisation (Wipo) 75 per cent of the world's patents are filed by China, Japan and the United States each year, followed by South Korea and Germany.
Last year almost 195,000 patents were filed across the world, and the US alone accounted for 48 per cent of those applications. This is no surprise considering these countries are known for their technologically advanced environments.
Although the Middle East lags firmly behind, there is still some hope for the region as greater investment pours into the higher education and science sectors in the hope of shifting oil-based economies to knowledge-based ones.
"Patents create property law and ownership around ideas. They are the core framework transforming the intangible into the most powerful economic driver," says Adam Noah, the director of intellectual property law at Globalfoundries which has 6,500 patents around the world including in the US, Germany, Korea and Singapore.
"If you want to assert your patent right in a particular market, you need to have a patent there. Put simply, if you don't have patent rights then you will be shut out of the market. These rights enable you to exclude others from practicing your invention, and that's a very powerful tool in business."
While the basic laws exist in the Middle East, they lack detail and can be inconsistent, lawyers say, and the biggest concern is the lack of enforcement.
"Generally, the patent system is less sophisticated than it needs to be in order to attract inward investment," says Katie Withers, senior legal consultant in IP and technology team at DLA Piper.
"The challenges are more in the realms of enforcement. We have the mechanics and ability to obtain and register patents and unitary rights across the GCC but we don't have the expertise or remedies in court to give people the confidence that these rights will be implemented."
While IP such as brand names and trademarks are easier to protect with counterfeits easier to spot, technology patents and software development differs.
"One of the issues is that there is no system of precedence and decisions are not published. There may be a case of dispute that we never know about," says Ms Withers.
In the UAE, the research firm IDC estimates that if the software piracy rate is reduced by 10 per cent this year, it would create an additional 939 IT jobs and contribute US$456 million (Dh1.67 billion) to GDP.
"If you want FDI [foreign direct investment] in a country, you need to respect IP rights, intellectual capital is key. There is a direct correlation with FDI. Some countries have a liberal view of interpreting these laws and, as a result, people become wary of investing there. Those that uphold IP laws see domestic innovation spurred," says Philippe De Backer at Bain & Co.
"The industry has moved from hard innovations to soft, it is all about data now not manufacturing physical goods in most parts of the world. If you want to thrive, you have to make sure the soft innovation side is also protected."
In 2011, 194 patents were filed in the UAE of which 35 were granted, up from 121 in 2010 when 28 patents were granted. These included patents for engines, pumps, turbines, computer technology and audiovisual technology. According to Wipo all patents filed by UAE residents were filed abroad in a foreign office rather than in the UAE.
The Ministry of Economy, says the UAE ranked second for the number of patents filed by Arab countries last year, after Saudi Arabia. Morocco was third with 17.
A healthy legislative environment for IP and patents is vital to innovation, which in turn improves and stimulates a nation's economy.
"For an inventor, you have to ask whether it is worth the effort to risk you savings and whether you would benefit from the initial hard work and investment if you do not have the legal protection," says Mr De Backer.
One significant opportunity for patent seekers in the region is the ability to apply for a GCC-wide patent through The Patent Office of the Cooperation Council for the Arab States of the Gulf which has received some 24,000 applications to date, 2,400 have been granted, and 14,000 are in process.
The technology sector in particular is especially sensitive to changes and copycat innovations but, while patents offer protection, they are not everlasting.
"Patents are impermanent, expiring in 20 years and often becoming obsolete well before then," says Mr Noah. "Staying ahead of the market requires an active programme around the generation and maintenance of the portfolio."